Originally posted by: JMapleton
I personally plan to skip buying what many consider a "starter home." It seems there is a sense that home ownership is equal to success and many young people as soon as they quality will go out and buy the first house they can afford after they get their first job with a 30 year loan and little money down.
Me personally, I plan to wait a few more years to save up as much as possible to buy a house that I personally will never need to upgrade (in terms of size or location). I just don't see the point in having to mess with a house when it's not necessary to have one, although I understand that some people have families early and need a house to put them in.
Anyone else doing this?
Depends on what you consider a starter home. I've lived in Arlington, VA, for the past four years. Really like the area.
Anyhow, my fiancee and I decided that the market was right around here and that we were going to buy. We did a lot of looking in our initial "starter" price range, basically up to $325k, in Arlington (mostly south), Falls Church, FC City (nothing in that range, believe me), Alexandria, etc. We didn't want a condo, but we weren't afraid to roll up our sleeves and rehab something. We almost bought in Falls Church for about 280k, a 3 story house that needed a top to bottom renovation. Ultimately, the # of short sales and REO in that area chased us out, we felt that the money we'd put it was going to get wiped out by our neighbors not paying.
Frustrated, we started looking closer to where we rented, mostly in Arlington, a couple rehab properties in North Arlington (North is historically more desirable than South for a number of factors), plus some larger lots and more finished places further south. At this point, we had adjusted our price range up to about 425k because that was the reality of the market we were shopping in. The downside is that we'd no longer be putting 10-15% down, we ended up doing 5%.
Probably 9 months ago, we ended up with a very small house within reasonable walking distance to the metro that was structurally and cosmetically sound right in the 400k range. It needs updates inside, but no pressing needs, everything is just very dated. The house is tiny (1000 above ground square feet) and the lot is small.
So it's a starter in the sense that it needs work to bring it up to date and very small. Probably not starter on the price, but it is if you consider that there aren't many non-condo properties that aren't total tear downs for the price in this area. I personally think a starter home is one where you compromise on any number of factors because you can't afford ideal. In that sense, this is a starter home, we got our location by sacrificing space, condition to a degree, and our original price range.
Probably a bigger risk than going for a pure starter home, but it's worked out so far and we're happy with it. Your plan is a good one, but depending on your area, you might want to see if you can find a bargain. Congress is doing everything it can to prop up prices now, afraid that people will walk away otherwise. Depending on where you live, you might be buying at or near the bottom. Our exit strategy is to rent this place out when we outgrow it (read: kids), so we purchased in a location that is rentable.
